One in ten workers now pays top tax rate

MORE than one in ten British workers - about three million people - are now paying income tax at the top rate, designed for high-earners, it was disclosed yesterday.

Official figures from the Inland Revenue showed that some 3.1 million out of Britain’s 29.4 million income tax payers were now subject to the 40 per cent rate, imposed on earnings over 34,515 a year.

That is one million more than paid the top rate in 1997 when Labour came to power.

An Inland Revenue spokes-man said that the increase in numbers of top-rate payers had happened "because people are more affluent now and getting paid more".

But financial experts suggested that a failure to uprate tax thresholds in line with inflation had led to more people going over the cut-off point for the standard rate of 22 per cent - a phenomenon known as "fiscal drag".

Unofficial calculations suggest that workers now have to earn just one-and-a-half times the national average income to fall into the top rate bracket, compared with twice the average income in 1997.

A Tory spokesman said that this meant many people in ordinary jobs, such as senior teachers, police officers and nurses, were paying taxes at rates initially intended only for the rich. "There must be serious doubt about the wisdom of imposing the top rate of tax on hard-working nurses, teachers, doctors and police officers," he said.